The mouse mammary tumor virus (MMTV) system has been studied for some time as a model for positive regulation of transcription by steroid hormones. Using a series of cell lines in which MMTV long terminal repeat (LTR) fusion genes are amplified on extrachromosomally replicating bovine papillomavirus (BPV) "minichromosomes," we demonstrated, by an exonuclease protection assay, that factors bind to the MMTV promoter in vivo in response to hormone stimulation. These factors were identified in crude nuclear extracts from mouse cells as NFl (-80 to -56 region) and F-i (-42 to +1 region). Activation of transcription at the MMTV promoter therefore appears to result from recruitment of preformed transcription factors to the promoter by the steroid receptor. The proopio-melanocortin (POMC) gene is negatively regulated by the same steroid receptor. We have prepared POMC-MMTV-BPV chimeric episomes and demonstrated positive regulation of MMTV and negative regulation of POMC on the same circular template. In addition, three factors that bind specifically to the POMC promoter have been identified in crude nuclear extracts.